Indorsement and Payment of Checks Drawn on the United States Treasury, 57907-57910 [2011-23896]

Download as PDF Federal Register / Vol. 76, No. 181 / Monday, September 19, 2011 / Rules and Regulations § 522.1014 Gamithromycin. (a) Specifications. Each milliliter (mL) of solution contains 150 milligrams (mg) gamithromycin. (b) Sponsor. See No. 050604 in § 510.600(c) of this chapter. (c) Related tolerances. See § 556.292 of this chapter. (d) Conditions of use—(1) Cattle—(i) Amount. Administer 6 mg/kilogram of body weight (2 mL per 110 pounds) one time by subcutaneous injection in the neck. (ii) Indications for use. For the treatment of bovine respiratory disease (BRD) associated with Mannheimia haemolytica, Pasteurella multocida, and Histophilus somni in beef and nonlactating dairy cattle; and for the control of respiratory disease in beef and nonlactating dairy cattle at high risk of developing BRD associated with M. haemolytica and P. multocida. (iii) Limitations. Cattle intended for human consumption must not be slaughtered within 35 days from the last treatment. Do not use in female dairy cattle 20 months of age or older. A withdrawal period has not been established for this product in preruminating calves. Do not use in calves to be processed for veal. Federal law restricts this drug to use by or on the order of a licensed veterinarian. (2) [Reserved] PART 556—TOLERANCES FOR RESIDUES OF NEW ANIMAL DRUGS IN FOOD 3. The authority citation for 21 CFR part 556 continues to read as follows: ■ Authority: 21 U.S.C. 342, 360b, 371. 4. Section 556.292 is added to read as follows: ■ tkelley on DSKG8SOYB1PROD with RULES § 556.292 Gamithromycin. (a) Acceptable Daily Intake (ADI). The ADI for total residues of gamithromycin is 10 micrograms per kilogram of body weight per day. (b) Tolerances. The tolerances for gamithromycin (the marker residue) are: (1) Cattle—(i) Liver (the target tissue): 500 parts per billion (ppb). (ii) Muscle. 150 ppb. (2) [Reserved] (c) Related conditions of use. See § 522.1014 of this chapter. Dated: September 13, 2011. Bernadette Dunham, Director, Center for Veterinary Medicine. [FR Doc. 2011–23874 Filed 9–16–11; 8:45 am] BILLING CODE 4160–01–P VerDate Mar<15>2010 13:21 Sep 16, 2011 Jkt 223001 57907 Food and Drug Administration it is a rule of ‘‘particular applicability.’’ Therefore, it is not subject to the congressional review requirements in 5 U.S.C. 801–808. 21 CFR Part 556 List of Subjects in 21 CFR Part 556 DEPARTMENT OF HEALTH AND HUMAN SERVICES [Docket No. FDA–2011–N–0003] Tolerances for Residues of New Animal Drugs in Food; Progesterone AGENCY: Food and Drug Administration, HHS. Final rule; technical amendment. Animal drugs, Foods. Therefore, under the Federal Food, Drug, and Cosmetic Act and under authority delegated to the Commissioner of Food and Drugs and redelegated to the Center for Veterinary Medicine, 21 CFR part 556 is amended as follows: ACTION: The Food and Drug Administration (FDA) is amending the animal drug regulations to update the allowable incremental increase for residues of progesterone in edible tissues of cattle and sheep based on the 1994 revised daily consumption values. This action is being taken to improve the accuracy of the regulations. DATES: This rule is effective September 19, 2011. FOR FURTHER INFORMATION CONTACT: Kevin Gaido, Center for Veterinary Medicine (HFV–153), Food and Drug Administration, 7500 Standish Pl., Rockville, MD 20855, 240–276–8212, email: kevin.gaido@fda.hhs.gov. SUPPLEMENTARY INFORMATION: Section 512(i) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360b(i)) (21 CFR 514.105(a)) directs FDA to establish tolerances by regulation, as necessary, when a new animal drug is approved for use in food-producing animals. Progesterone is approved for use in subcutaneous implants used for increased rate of weight gain in suckling beef calves and steers (21 CFR 522.1940) and in vaginal inserts used for management of the estrous cycle in female cattle and ewes (21 CFR 529.1940). FDA has noticed the animal drug tolerance regulations do not reflect levels for progesterone using the daily consumption values in the current guidance document, ‘‘Guideline for Establishing a Safe Concentration’’ (59 FR 37499, July 22, 1994). At this time, FDA is amending 21 CFR 556.540 to reflect the revised daily consumption values as applied to edible tissues of cattle. Sheep are considered a minor species for human food safety assessment, and the updated allowable incremental increase limits for cattle tissues based on the revised daily consumption values are applicable to sheep. This action is being taken to improve the accuracy of the regulations. This rule does not meet the definition of ‘‘rule’’ in 5 U.S.C. 804(3)(A) because SUMMARY: PO 00000 Frm 00011 Fmt 4700 Sfmt 4700 PART 556—TOLERANCES FOR RESIDUES OF NEW ANIMAL DRUGS IN FOOD 1. The authority citation for 21 CFR part 556 continues to read as follows: ■ Authority: 21 U.S.C. 342, 360b, 371. ■ 2. Revise § 556.540 to read as follows: § 556.540 Progesterone. (a) [Reserved] (b) Tolerances. Residues of progesterone are not permitted in excess of the following increments above the concentrations of progesterone naturally present in untreated animals: (1) Cattle and sheep—(i) Muscle: 5 parts per billion (ppb). (ii) Liver: 15 ppb. (iii) Kidney: 30 ppb. (iv) Fat: 30 ppb. (2) [Reserved] (c) Related conditions of use. See §§ 522.1940 and 529.1940 of this chapter. Dated: September 13, 2011. Bernadette Dunham, Director, Center for Veterinary Medicine. [FR Doc. 2011–23867 Filed 9–16–11; 8:45 am] BILLING CODE 4160–01–P DEPARTMENT OF THE TREASURY Fiscal Service 31 CFR Part 240 RIN 1510–AB25 Indorsement and Payment of Checks Drawn on the United States Treasury Financial Management Service, Fiscal Service, Treasury. ACTION: Final rule. AGENCY: This final rule authorizes the Department of the Treasury (Treasury), Financial Management Service (FMS), to direct Federal Reserve Banks to debit a financial institution’s Master Account for all check reclamations against the financial institution that the financial institution has not protested. Financial SUMMARY: E:\FR\FM\19SER1.SGM 19SER1 57908 Federal Register / Vol. 76, No. 181 / Monday, September 19, 2011 / Rules and Regulations institutions will continue to have the right to file a protest with FMS if they believe a proposed reclamation is in error. DATES: This rule is effective October 19, 2011. FOR FURTHER INFORMATION CONTACT: Sandra Walls, Reclamation Branch Manager, Check Resolution Division, at (202) 874–7945 or sandra.walls@fms.treas.gov; or William J. Erle, Senior Counsel, at (202) 874– 6975 or william.erle@fms.treas.gov. SUPPLEMENTARY INFORMATION: tkelley on DSKG8SOYB1PROD with RULES I. Background The Department of the Treasury (Treasury), Financial Management Service (FMS),1 is amending its regulation at 31 CFR part 240 (Part 240), governing the indorsement and payment of checks drawn on the United States Treasury. Part 240 sets forth how checks may be indorsed and the remedies available to Treasury when checks are improperly negotiated. The rule provides for the allocation of loss between the Government and indorsers of the check. In addition, Part 240 provides information on how Treasury will collect debts owed by financial institutions and other indorsers when they fail to pay check reclamations made by Treasury. On January 4, 2010, Treasury issued a notice of proposed rulemaking (NPRM) requesting comments on its proposal to provide Treasury with the authority to direct Federal Reserve Banks to debit a financial institution’s Master Account for all check reclamations for which the financial institution has not submitted a valid protest with supporting documentation. See 75 FR 95. The proposed rule explained that FMS will notify the financial institution of the reclamation by sending a NOTICE OF DIRECT DEBIT (RECLAMATION), which also will inform the financial institution that, if the reclamation is not paid by the 30th day after the direct debit notice date, the financial institution’s Master Account will be debited by its servicing Federal Reserve Bank. II. Discussion of Comments FMS received two comments on the proposed rule—one from a financial institution and one from a banking association. Both commenters indicated that the proposed 30-day notice period before a direct debit is carried out was too short. Rather, they suggested that 1 FMS is the bureau within Treasury charged with implementing Treasury’s authority in this area. The terms Treasury and FMS are used interchangeably in this rule. VerDate Mar<15>2010 13:21 Sep 16, 2011 Jkt 223001 FMS provide a financial institution with notice 60 days before directing the Federal Reserve to debit the financial institution’s Master Account. FMS carefully considered this comment and decided to keep the proposed 30-day notice period. Currently 95% of all Treasury reclamations are already paid by financial institutions within 30 days. An extended processing time would not be consistent with the goal of the revised regulation—to expedite and streamline the process of collecting unpaid reclamations. When a financial institution has reason to believe the reclamation direct debit should not proceed, it may file a protest. Both commenters indicated that FMS should clarify which account will be debited in a reclamation direct debit. They pointed out that the NPRM refers to both an ‘‘account’’ and a ‘‘reserve account.’’ FMS agrees that this point should be clarified. Therefore, the final rule includes a new definition for ‘‘Master Account’’ that mirrors the definition found in Federal Reserve Banks Operating Circular 1. Additionally, throughout the rule, ‘‘reserve account’’ and ‘‘account’’ have been replaced with ‘‘Master Account.’’ Although not a direct comment on the proposed rule, both commenters expressed concern with the amount of time FMS takes to process reclamation protests. In response to this concern, FMS notes that it routinely exceeds the goal set forth in Part 240: that FMS will make every effort to decide a properly submitted protest within 60 days. In fiscal year 2010, 85% of bank protests received were resolved within 30 days. Still, some complicated protests take longer to resolve. FMS will continue to work diligently to make final decisions as quickly as possible. Contrary to one commenter’s assertion, FMS maintains a reclamations Web page (http:// www.fms.treas.gov/goldbook) that provides a telephone number, a facsimile number, an e-mail address, and a mailing address for financial institutions to use to get information about their protests. Finally, one commenter asked FMS to include in the final rule requirements for refund transaction processing. The commenter was concerned that, in the event FMS provides a refund for a reclamation payment, the refund may include interest and penalties already paid by the financial institution in addition to the original reclamation debt. To maintain accurate accounting for refund transactions, the commenter asked FMS to provide more information about the refund amount and to include the requirements for refund transaction processing in the final rule. Currently, PO 00000 Frm 00012 Fmt 4700 Sfmt 4700 on the check issued in settlement for a bank protest, FMS prints ‘‘refund for check #XXXX–XX,XXX,XXX’’ to aid the financial institution in cross-referencing against their reclamation records. After direct debiting has been instituted, FMS will begin to make changes to its systems to allow electronic refunds via credit to the financial institution’s Master Account. FMS believes that more information about the refund amount is not necessary because normally, penalties, administrative fees, and interest will not be assessed since the debit will occur on the 31st day after the reclamation date. III. Clarifications and Technical Corrections FMS is amending § 240.9(b)(3)(ii) to clarify that Treasury must receive a reclamation protest within 60 days after the reclamation date. The NPRM specified that if a financial institution files a reclamation protest within 30 days after the reclamation date, Treasury would not instruct the Federal Reserve Bank to debit the financial institution’s Master Account. See § 240.9(a)(1)(iii). The preamble to the NPRM specified that a financial institution has an additional 30 days after the direct debit date to submit a reclamation protest. To provide for a 30day period before direct debit and a 30day period after direct debit, § 240.9(b)(3)(ii) is amended to specify a total of 60 days after the reclamation date. Throughout the rule, the term ‘‘Director, Financial Processing Division,’’ is replaced with ‘‘responsible FMS Director.’’ This change allows the rule to remain accurate should reorganizations occur. Sections 240.9(a)(2) and 240.9(b)(3) are revised to update the mailing address for submitting a request to inspect Treasury records, to submit a repayment agreement, or to submit a reclamation protest. The rule is revised to provide addresses through the Check Claims Web site or the Goldbook: The Check Reclamation Guide. Sections 240.9(a)(1)(i) and (iii), and 240.9(b)(4)(iii) are revised to replace the words ‘‘of’’ and ‘‘from’’ with the word ‘‘after,’’ to make it clear that a financial institution has 30 days after the reclamation date to pay the reclamation debt or file a protest before Treasury instructs the Federal Reserve Bank to debit the financial institution’s Master Account. Therefore, the debit will occur on the 31st day after the reclamation date. This Final Rule also corrects the NPRM by spelling the word E:\FR\FM\19SER1.SGM 19SER1 Federal Register / Vol. 76, No. 181 / Monday, September 19, 2011 / Rules and Regulations ‘‘indorsement’’ with an ‘‘i’’ wherever it appears. IV. Procedural Analyses Regulatory Planning and Review The final rule does not meet the criteria for a ‘‘significant regulatory action’’ as defined in Executive Order 12866. Therefore, the regulatory review procedures contained therein do not apply. Regulatory Flexibility Act Analysis It is hereby certified that the rule will not have a significant economic impact on a substantial number of small entities. This rule would eliminate certain administrative fees and interest and penalty charges in order to streamline and automate reclamation procedures. The changes to the regulation related to automating reclamations should have a minimal economic impact on small financial institutions and in fact, may reduce some costs for financial institutions affected by the changes. Accordingly, a regulatory flexibility analysis under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) is not required. List of Subjects in 31 CFR Part 240 Banks, Banking, Checks, Counterfeit checks, Federal Reserve system, Forgery, and Guarantees. For the reasons set forth in the preamble, we are amending 31 CFR part 240 as follows: PART 240—INDORSEMENT AND PAYMENT OF CHECKS DRAWN ON THE UNITED STATES TREASURY 1. The authority citation for part 240 continues to read as follows: ■ Authority: 5 U.S.C. 301; 12 U.S.C. 391; 31 U.S.C. 321, 3327, 3328, 3331, 3334, 3343, 3711, 3712, 3716, 3717; 332 U.S. 234 (1947); 318 U.S. 363 (1943). 2. In part 240 revise all references to ‘‘the Director, Financial Processing Division’’ and ‘‘the Director of the Financial Processing Division’’ wherever they appear to read ‘‘the responsible FMS Director’’. ■ 3. In § 240.1, add paragraph (d) to read as follows: ■ § 240.1 Scope of regulations. tkelley on DSKG8SOYB1PROD with RULES * * * * * (d) A financial institution’s indorsement or presentment of a U.S. Treasury check shall constitute its agreement to this part. The financial institution hereby authorizes its servicing Federal Reserve Bank to debit the financial institution’s Federal Reserve Master Account for the amount VerDate Mar<15>2010 13:21 Sep 16, 2011 Jkt 223001 of the reclamation and any accrued interest, penalties and/or administrative costs in accordance with the provisions of § 240.9. 4. In § 240.2, redesignate paragraphs (t) through (mm) as (u) through (nn), and add new paragraph (t) to read as follows: ■ § 240.2 Definitions. * * * * * (t) Master Account means the record of financial rights and obligations of an account holder and the Federal Reserve Bank with respect to each other, where opening, intraday, and closing balances are determined. * * * * * 5. In § 240.9, revise paragraphs (a), (b)(3) introductory text, (b)(3)(ii), and (b)(4)(iii) to read as follows: ■ § 240.9 Reclamation procedures; reclamation protests. (a) Reclamation procedures. (1) Treasury will send a ‘‘NOTICE OF DIRECT DEBIT (RECLAMATION)’’ to the reclamation debtor in accordance with § 240.8(a). This notice will advise the reclamation debtor of the amount demanded and the reason for the demand. Treasury will provide notice to the reclamation debtor that: (i) If the reclamation debt is not paid within 30 days after the reclamation date, Treasury intends to collect the amount outstanding by instructing the appropriate Federal Reserve Bank to debit on the 31st day the Master Account used by the reclamation debtor. The Federal Reserve Bank will provide advice of the debit to the reclamation debtor; (ii) The reclamation debtor has an opportunity to inspect and copy Treasury’s records with respect to the reclamation debt; (iii) The reclamation debtor may, by filing a protest in accordance with § 240.9(b), request Treasury to review its decision that the reclamation debtor is liable for the reclamation debt. If such a protest is filed within 30 days after the reclamation date, Treasury will not instruct the appropriate Federal Reserve Bank to debit the Master Account used by the reclamation debtor while the protest is still pending; and (iv) The reclamation debtor has an opportunity to enter into a written agreement with Treasury for the repayment of the reclamation debt. A request for a repayment agreement must be accompanied by documentary proof that satisfies Treasury that the reclamation debtor is unable to repay the entire amount owed when due. PO 00000 Frm 00013 Fmt 4700 Sfmt 4700 57909 (2) Requests by a reclamation debtor for an appointment to inspect and copy Treasury’s records with respect to a reclamation debt and requests to enter into repayment agreements must be sent in writing to the address provided on the Check Claims Web site at http:// www.fms.treas.gov/checkclaims or to such other address as Treasury may publish in the Goldbook: The Check Reclamation Guide, which can be found at http://www.fms.treas.gov. (3) If Treasury determines a reclamation debt is due and the Federal Reserve Bank is unable to debit the financial institution’s Master Account, FMS will assess interest, penalties, and administrative costs in accordance with § 240.8. Additionally, Treasury will proceed to collect the reclamation debt through offset in accordance with § 240.10 and Treasury Check Offset in accordance with § 240.11. (4) If Treasury determines a reclamation has been made in error, Treasury will abandon the reclamation. If Treasury already has collected the amount of the reclamation from the reclamation debtor, Treasury will promptly refund to the reclamation debtor the amount of its payment. (b) * * * (3) Procedures for filing a protest. A reclamation protest must be sent in writing to the address provided on the Check Claims Web site at http:// www.fms.treas.gov/checkclaims or to such other address as Treasury may publish in the Goldbook: The Check Reclamation Guide, which can be found at http://www.fms.treas.gov. * * * * * (ii) Treasury will not consider reclamation protests received more than 60 days after the reclamation date. * * * * * (4) * * * (iii) If the responsible FMS Director, or an authorized designee, finds, by a preponderance of the evidence, the reclamation debtor is liable for the reclamation debt, Treasury will notify the reclamation debtor of his or her decision in writing. If the reclamation debtor has not paid the reclamation in full, Treasury will direct the Federal Reserve Bank to debit the financial institution’s Master Account immediately, provided at least 30 days have passed after the date of the NOTICE OF DIRECT DEBIT (RECLAMATION). If at least 30 days have not yet passed after the date of the NOTICE OF DIRECT DEBIT (RECLAMATION), Treasury will direct the Federal Reserve Bank to debit the financial institution’s Master Account on the 31st day after the date of the E:\FR\FM\19SER1.SGM 19SER1 57910 Federal Register / Vol. 76, No. 181 / Monday, September 19, 2011 / Rules and Regulations NOTICE OF DIRECT DEBIT (RECLAMATION). The Federal Reserve Bank will provide advice of the debit to the reclamation debtor. If the appropriate Federal Reserve Bank is unable to debit a reclamation debtor’s Master Account, Treasury will proceed to collect the reclamation debt through offset in accordance with § 240.10 and § 240.11. * * * * * Dated: September 12, 2011. Richard L. Gregg, Fiscal Assistant Secretary. [FR Doc. 2011–23896 Filed 9–16–11; 8:45 am] BILLING CODE 4810–35–P DEPARTMENT OF HOMELAND SECURITY Coast Guard 33 CFR Part 165 [Docket No. USCG–2011–0868] RIN 1625–AA11 Regulated Navigation Area; Route 24 Bridge Construction, Tiverton and Portsmouth, RI Coast Guard, DHS. Temporary interim rule with request for comments. AGENCY: ACTION: The Coast Guard is establishing a regulated navigation area (RNA) on the navigable waters of the Sakonnet River under and surrounding construction of the new Route 24 bridge that crosses the Sakonnet River between Tiverton and Portsmouth, Rhode Island. This rule implements certain safety measures including establishment of a temporary channel beneath the bridge, speed restrictions, and suspension of all vessel traffic within the RNA during construction operations that could pose an imminent hazard to vessels operating in the area. This rule is necessary to provide for the safety of life on the navigable waters during construction of the Route 24 bridge over the main channel of the Sakonnet River. DATES: This rule is effective on September 19, 2011 until 11:59 p.m. on May 1, 2013. This rule is effective with actual notice for purposes of enforcement from 8 a.m. on September 9, 2011, until 11:59 p.m. on May 1, 2013. Public comments may be submitted throughout the effective period. ADDRESSES: You may submit comments identified by docket number USCG– 2011–0868 using any one of the following methods: tkelley on DSKG8SOYB1PROD with RULES SUMMARY: VerDate Mar<15>2010 13:21 Sep 16, 2011 Jkt 223001 • Federal e-Rulemaking Portal: http://www.regulations.gov. • Fax: 202–493–2251. • Mail: Docket Management Facility (M–30), U.S. Department of Transportation, West Building Ground Floor, Room W12–140, 1200 New Jersey Avenue, SE., Washington, DC 20590– 0001. • Hand Delivery: Same as mail address above, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. The telephone number is 202–366–9329. To avoid duplication, please use only one of these four methods. See the ‘‘Public Participation and Request for Comments’’ portion of the SUPPLEMENTARY INFORMATION section below for instructions on submitting comments. Documents indicated in this preamble as being available in the docket are part of docket USCG–2011–0868 and are available online by going to http:// www.regulations.gov, inserting USCG– 2011–0868 in the ‘‘Keyword’’ box, and then clicking ‘‘Search.’’ They are also available for inspection or copying at the Docket Management Facility (M–30), U.S. Department of Transportation, West Building Ground Floor, Room W12–140, 1200 New Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m., Monday through Friday, except Federal holidays. FOR FURTHER INFORMATION CONTACT: If you have questions on this temporary rule, call or e-mail Mr. Edward G. LeBlanc, Chief of the Waterways Management Division, U.S. Coast Guard Sector Southeastern New England; telephone 401–435–2351, e-mail Edward.G.LeBlanc@uscg.mil, or Lieutenant Junior Grade Isaac Slavitt, Coast Guard First District Waterways Management Branch, telephone 617– 223–8385, e-mail Isaac.M.Slavitt@uscg.mil. If you have questions on viewing the docket, call Renee V. Wright, Program Manager, Docket Operations, telephone 202–366– 9826. SUPPLEMENTARY INFORMATION: Public Participation and Request for Comments We encourage you to participate in this rulemaking by submitting comments and related materials. All comments received will be posted, without change, to http:// www.regulations.gov and will include any personal information you have provided. As this temporary interim rule will be in effect before the end of the comment period, the Coast Guard will evaluate PO 00000 Frm 00014 Fmt 4700 Sfmt 4700 and revise this rule as necessary to address significant public comments. Submitting Comments If you submit a comment, please include the docket number for this rulemaking (USCG–2011–0868), indicate the specific section of this document to which each comment applies, and provide a reason for each suggestion or recommendation. You may submit your comments and material online (via http:// www.regulations.gov) or by fax, mail, or hand delivery, but please use only one of these means. If you submit a comment online via http:// www.regulations.gov, it will be considered received by the Coast Guard when you successfully transmit the comment. If you fax, hand deliver, or mail your comment, it will be considered as having been received by the Coast Guard when it is received at the Docket Management Facility. We recommend that you include your name and a mailing address, an e-mail address, or a telephone number in the body of your document so that we can contact you if we have questions regarding your submission. To submit your comment online, go to http://www.regulations.gov, click on the ‘‘submit a comment’’ box, which will then become highlighted in blue. In the ‘‘Document Type’’ drop down menu select ‘‘Proposed Rule’’ and insert ‘‘USCG–2011–0868’’ in the ‘‘Keyword’’ box. Click ‘‘Search’’ then click on the balloon shape in the ‘‘Actions’’ column. If you submit comments by mail or hand delivery, submit them in an unbound format, no larger than 81⁄2 by 11 inches, suitable for copying and electronic filing. If you submit comments by mail and would like to know that they reached the Facility, please enclose a stamped, self-addressed postcard or envelope. We will consider all comments and material received during the comment period and may change this rule based on your comments. Viewing Comments and Documents To view comments, as well as documents mentioned in this preamble as being available in the docket, go to http://www.regulations.gov, click on the ‘‘read comments’’ box, which will then become highlighted in blue. In the ‘‘Keyword’’ box insert ‘‘USCG–2011– 0868’’ and click ‘‘Search.’’ Click the ‘‘Open Docket Folder’’ in the ‘‘Actions’’ column. You may also visit the Docket Management Facility in Room W12–140 on the ground floor of the Department of Transportation West Building, 1200 New Jersey Avenue, SE., Washington, DC 20590, between 9 a.m. and 5 p.m., E:\FR\FM\19SER1.SGM 19SER1

Agencies

[Federal Register Volume 76, Number 181 (Monday, September 19, 2011)]
[Rules and Regulations]
[Pages 57907-57910]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-23896]


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DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Part 240

RIN 1510-AB25


Indorsement and Payment of Checks Drawn on the United States 
Treasury

AGENCY: Financial Management Service, Fiscal Service, Treasury.

ACTION: Final rule.

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SUMMARY: This final rule authorizes the Department of the Treasury 
(Treasury), Financial Management Service (FMS), to direct Federal 
Reserve Banks to debit a financial institution's Master Account for all 
check reclamations against the financial institution that the financial 
institution has not protested. Financial

[[Page 57908]]

institutions will continue to have the right to file a protest with FMS 
if they believe a proposed reclamation is in error.

DATES: This rule is effective October 19, 2011.

FOR FURTHER INFORMATION CONTACT: Sandra Walls, Reclamation Branch 
Manager, Check Resolution Division, at (202) 874-7945 or 
sandra.walls@fms.treas.gov; or William J. Erle, Senior Counsel, at 
(202) 874-6975 or william.erle@fms.treas.gov.

SUPPLEMENTARY INFORMATION:

I. Background

    The Department of the Treasury (Treasury), Financial Management 
Service (FMS),\1\ is amending its regulation at 31 CFR part 240 (Part 
240), governing the indorsement and payment of checks drawn on the 
United States Treasury. Part 240 sets forth how checks may be indorsed 
and the remedies available to Treasury when checks are improperly 
negotiated. The rule provides for the allocation of loss between the 
Government and indorsers of the check. In addition, Part 240 provides 
information on how Treasury will collect debts owed by financial 
institutions and other indorsers when they fail to pay check 
reclamations made by Treasury.
---------------------------------------------------------------------------

    \1\ FMS is the bureau within Treasury charged with implementing 
Treasury's authority in this area. The terms Treasury and FMS are 
used interchangeably in this rule.
---------------------------------------------------------------------------

    On January 4, 2010, Treasury issued a notice of proposed rulemaking 
(NPRM) requesting comments on its proposal to provide Treasury with the 
authority to direct Federal Reserve Banks to debit a financial 
institution's Master Account for all check reclamations for which the 
financial institution has not submitted a valid protest with supporting 
documentation. See 75 FR 95. The proposed rule explained that FMS will 
notify the financial institution of the reclamation by sending a NOTICE 
OF DIRECT DEBIT (RECLAMATION), which also will inform the financial 
institution that, if the reclamation is not paid by the 30th day after 
the direct debit notice date, the financial institution's Master 
Account will be debited by its servicing Federal Reserve Bank.

II. Discussion of Comments

    FMS received two comments on the proposed rule--one from a 
financial institution and one from a banking association. Both 
commenters indicated that the proposed 30-day notice period before a 
direct debit is carried out was too short. Rather, they suggested that 
FMS provide a financial institution with notice 60 days before 
directing the Federal Reserve to debit the financial institution's 
Master Account. FMS carefully considered this comment and decided to 
keep the proposed 30-day notice period. Currently 95% of all Treasury 
reclamations are already paid by financial institutions within 30 days. 
An extended processing time would not be consistent with the goal of 
the revised regulation--to expedite and streamline the process of 
collecting unpaid reclamations. When a financial institution has reason 
to believe the reclamation direct debit should not proceed, it may file 
a protest.
    Both commenters indicated that FMS should clarify which account 
will be debited in a reclamation direct debit. They pointed out that 
the NPRM refers to both an ``account'' and a ``reserve account.'' FMS 
agrees that this point should be clarified. Therefore, the final rule 
includes a new definition for ``Master Account'' that mirrors the 
definition found in Federal Reserve Banks Operating Circular 1. 
Additionally, throughout the rule, ``reserve account'' and ``account'' 
have been replaced with ``Master Account.''
    Although not a direct comment on the proposed rule, both commenters 
expressed concern with the amount of time FMS takes to process 
reclamation protests. In response to this concern, FMS notes that it 
routinely exceeds the goal set forth in Part 240: that FMS will make 
every effort to decide a properly submitted protest within 60 days. In 
fiscal year 2010, 85% of bank protests received were resolved within 30 
days. Still, some complicated protests take longer to resolve. FMS will 
continue to work diligently to make final decisions as quickly as 
possible. Contrary to one commenter's assertion, FMS maintains a 
reclamations Web page (http://www.fms.treas.gov/goldbook) that provides 
a telephone number, a facsimile number, an e-mail address, and a 
mailing address for financial institutions to use to get information 
about their protests.
    Finally, one commenter asked FMS to include in the final rule 
requirements for refund transaction processing. The commenter was 
concerned that, in the event FMS provides a refund for a reclamation 
payment, the refund may include interest and penalties already paid by 
the financial institution in addition to the original reclamation debt. 
To maintain accurate accounting for refund transactions, the commenter 
asked FMS to provide more information about the refund amount and to 
include the requirements for refund transaction processing in the final 
rule. Currently, on the check issued in settlement for a bank protest, 
FMS prints ``refund for check XXXX-XX,XXX,XXX'' to aid the 
financial institution in cross-referencing against their reclamation 
records. After direct debiting has been instituted, FMS will begin to 
make changes to its systems to allow electronic refunds via credit to 
the financial institution's Master Account. FMS believes that more 
information about the refund amount is not necessary because normally, 
penalties, administrative fees, and interest will not be assessed since 
the debit will occur on the 31st day after the reclamation date.

III. Clarifications and Technical Corrections

    FMS is amending Sec.  240.9(b)(3)(ii) to clarify that Treasury must 
receive a reclamation protest within 60 days after the reclamation 
date. The NPRM specified that if a financial institution files a 
reclamation protest within 30 days after the reclamation date, Treasury 
would not instruct the Federal Reserve Bank to debit the financial 
institution's Master Account. See Sec.  240.9(a)(1)(iii). The preamble 
to the NPRM specified that a financial institution has an additional 30 
days after the direct debit date to submit a reclamation protest. To 
provide for a 30-day period before direct debit and a 30-day period 
after direct debit, Sec.  240.9(b)(3)(ii) is amended to specify a total 
of 60 days after the reclamation date.
    Throughout the rule, the term ``Director, Financial Processing 
Division,'' is replaced with ``responsible FMS Director.'' This change 
allows the rule to remain accurate should re-organizations occur.
    Sections 240.9(a)(2) and 240.9(b)(3) are revised to update the 
mailing address for submitting a request to inspect Treasury records, 
to submit a repayment agreement, or to submit a reclamation protest. 
The rule is revised to provide addresses through the Check Claims Web 
site or the Goldbook: The Check Reclamation Guide.
    Sections 240.9(a)(1)(i) and (iii), and 240.9(b)(4)(iii) are revised 
to replace the words ``of'' and ``from'' with the word ``after,'' to 
make it clear that a financial institution has 30 days after the 
reclamation date to pay the reclamation debt or file a protest before 
Treasury instructs the Federal Reserve Bank to debit the financial 
institution's Master Account. Therefore, the debit will occur on the 
31st day after the reclamation date.
    This Final Rule also corrects the NPRM by spelling the word

[[Page 57909]]

``indorsement'' with an ``i'' wherever it appears.

IV. Procedural Analyses

Regulatory Planning and Review

    The final rule does not meet the criteria for a ``significant 
regulatory action'' as defined in Executive Order 12866. Therefore, the 
regulatory review procedures contained therein do not apply.

Regulatory Flexibility Act Analysis

    It is hereby certified that the rule will not have a significant 
economic impact on a substantial number of small entities. This rule 
would eliminate certain administrative fees and interest and penalty 
charges in order to streamline and automate reclamation procedures. The 
changes to the regulation related to automating reclamations should 
have a minimal economic impact on small financial institutions and in 
fact, may reduce some costs for financial institutions affected by the 
changes. Accordingly, a regulatory flexibility analysis under the 
Regulatory Flexibility Act (5 U.S.C. 601 et seq.) is not required.

List of Subjects in 31 CFR Part 240

    Banks, Banking, Checks, Counterfeit checks, Federal Reserve system, 
Forgery, and Guarantees.

    For the reasons set forth in the preamble, we are amending 31 CFR 
part 240 as follows:

PART 240--INDORSEMENT AND PAYMENT OF CHECKS DRAWN ON THE UNITED 
STATES TREASURY

0
1. The authority citation for part 240 continues to read as follows:

    Authority:  5 U.S.C. 301; 12 U.S.C. 391; 31 U.S.C. 321, 3327, 
3328, 3331, 3334, 3343, 3711, 3712, 3716, 3717; 332 U.S. 234 (1947); 
318 U.S. 363 (1943).


0
2. In part 240 revise all references to ``the Director, Financial 
Processing Division'' and ``the Director of the Financial Processing 
Division'' wherever they appear to read ``the responsible FMS 
Director''.


0
3. In Sec.  240.1, add paragraph (d) to read as follows:


Sec.  240.1  Scope of regulations.

* * * * *
    (d) A financial institution's indorsement or presentment of a U.S. 
Treasury check shall constitute its agreement to this part. The 
financial institution hereby authorizes its servicing Federal Reserve 
Bank to debit the financial institution's Federal Reserve Master 
Account for the amount of the reclamation and any accrued interest, 
penalties and/or administrative costs in accordance with the provisions 
of Sec.  240.9.


0
4. In Sec.  240.2, redesignate paragraphs (t) through (mm) as (u) 
through (nn), and add new paragraph (t) to read as follows:


Sec.  240.2  Definitions.

* * * * *
    (t) Master Account means the record of financial rights and 
obligations of an account holder and the Federal Reserve Bank with 
respect to each other, where opening, intraday, and closing balances 
are determined.
* * * * *


0
5. In Sec.  240.9, revise paragraphs (a), (b)(3) introductory text, 
(b)(3)(ii), and (b)(4)(iii) to read as follows:


Sec.  240.9  Reclamation procedures; reclamation protests.

    (a) Reclamation procedures. (1) Treasury will send a ``NOTICE OF 
DIRECT DEBIT (RECLAMATION)'' to the reclamation debtor in accordance 
with Sec.  240.8(a). This notice will advise the reclamation debtor of 
the amount demanded and the reason for the demand. Treasury will 
provide notice to the reclamation debtor that:
    (i) If the reclamation debt is not paid within 30 days after the 
reclamation date, Treasury intends to collect the amount outstanding by 
instructing the appropriate Federal Reserve Bank to debit on the 31st 
day the Master Account used by the reclamation debtor. The Federal 
Reserve Bank will provide advice of the debit to the reclamation 
debtor;
    (ii) The reclamation debtor has an opportunity to inspect and copy 
Treasury's records with respect to the reclamation debt;
    (iii) The reclamation debtor may, by filing a protest in accordance 
with Sec.  240.9(b), request Treasury to review its decision that the 
reclamation debtor is liable for the reclamation debt. If such a 
protest is filed within 30 days after the reclamation date, Treasury 
will not instruct the appropriate Federal Reserve Bank to debit the 
Master Account used by the reclamation debtor while the protest is 
still pending; and
    (iv) The reclamation debtor has an opportunity to enter into a 
written agreement with Treasury for the repayment of the reclamation 
debt. A request for a repayment agreement must be accompanied by 
documentary proof that satisfies Treasury that the reclamation debtor 
is unable to repay the entire amount owed when due.
    (2) Requests by a reclamation debtor for an appointment to inspect 
and copy Treasury's records with respect to a reclamation debt and 
requests to enter into repayment agreements must be sent in writing to 
the address provided on the Check Claims Web site at http://www.fms.treas.gov/checkclaims or to such other address as Treasury may 
publish in the Goldbook: The Check Reclamation Guide, which can be 
found at http://www.fms.treas.gov.
    (3) If Treasury determines a reclamation debt is due and the 
Federal Reserve Bank is unable to debit the financial institution's 
Master Account, FMS will assess interest, penalties, and administrative 
costs in accordance with Sec.  240.8. Additionally, Treasury will 
proceed to collect the reclamation debt through offset in accordance 
with Sec.  240.10 and Treasury Check Offset in accordance with Sec.  
240.11.
    (4) If Treasury determines a reclamation has been made in error, 
Treasury will abandon the reclamation. If Treasury already has 
collected the amount of the reclamation from the reclamation debtor, 
Treasury will promptly refund to the reclamation debtor the amount of 
its payment.
    (b) * * *
    (3) Procedures for filing a protest. A reclamation protest must be 
sent in writing to the address provided on the Check Claims Web site at 
http://www.fms.treas.gov/checkclaims or to such other address as 
Treasury may publish in the Goldbook: The Check Reclamation Guide, 
which can be found at http://www.fms.treas.gov.
* * * * *
    (ii) Treasury will not consider reclamation protests received more 
than 60 days after the reclamation date.
* * * * *
    (4) * * *
    (iii) If the responsible FMS Director, or an authorized designee, 
finds, by a preponderance of the evidence, the reclamation debtor is 
liable for the reclamation debt, Treasury will notify the reclamation 
debtor of his or her decision in writing. If the reclamation debtor has 
not paid the reclamation in full, Treasury will direct the Federal 
Reserve Bank to debit the financial institution's Master Account 
immediately, provided at least 30 days have passed after the date of 
the NOTICE OF DIRECT DEBIT (RECLAMATION). If at least 30 days have not 
yet passed after the date of the NOTICE OF DIRECT DEBIT (RECLAMATION), 
Treasury will direct the Federal Reserve Bank to debit the financial 
institution's Master Account on the 31st day after the date of the

[[Page 57910]]

NOTICE OF DIRECT DEBIT (RECLAMATION). The Federal Reserve Bank will 
provide advice of the debit to the reclamation debtor. If the 
appropriate Federal Reserve Bank is unable to debit a reclamation 
debtor's Master Account, Treasury will proceed to collect the 
reclamation debt through offset in accordance with Sec.  240.10 and 
Sec.  240.11.
* * * * *

    Dated: September 12, 2011.
Richard L. Gregg,
Fiscal Assistant Secretary.
[FR Doc. 2011-23896 Filed 9-16-11; 8:45 am]
BILLING CODE 4810-35-P